Fat is a strategic issue
Fat was a feminist issue, in the famous slogan coined by the author and activist Susie Orbach. But now obesity is strategic. Any business in the food and drink industry, including those of us involved
in marketing the products, needs to take it seriously. It touches on public policy areas from media to health. And it has a special relevance to the youth market, because obesity in children is such an emotive subject – and youth marketing is such important territory.
Responsibility for obesity is now seen to be corporate as well as personal. We are implicated along with clients in food manufacturing, retailing, media and other sectors such as health. It is a complex issue which demonstrates how corporate responsibility (CR) reaches into the heart of business and needs to be integrated into strategy.
For example, strategic marketing and futures consultancy, Henley Centre produced a strategy paper in October 2004 which argues that corporate responsibility for obesity challenges the food industry’s existing business models, and consequently the way we service the industry.
Cultural concerns about eating trends had been rumbling at a fairly low level for several years. More recently, there has been an acceleration as several cultural and social trends collided. Children are a special concern. Britain’s Chief Medical Officer has suggested that children growing up today will have a shorter life expectancy than their parents because of the spread of obesity among young people. Governments concerned about the potential health costs have become eager to promote increased exercise and have begun to confront public policy issues such as food labelling and advertising.
The result is that fast food, confectionery and soft drinks companies find themselves in the firing line over the classic kids’ diet of cola, fries and burgers. On the positive side, there has been a growing interest in authenticity and provenance, and companies have been adding healthier alternatives to product ranges giving customers more choice. That means new market opportunities. The combination of these concerns has changed the rules for food companies. The parallels with tobacco and alcohol are obvious, although not absolute. Long-standing assumptions have been questioned, for example about the legitimacy of advertising and sponsorship. And the focus has already extended from obesity to broader health issues, such as food additives.
Henley Centre work explored these and other drivers of the obesity issue, and developed several scenarios to explore future obesity levels and attitudes to it between now and 2014. The Henley Centre initially identified over 50 drivers which could influence obesity levels, and grouped these into nine clusters, such as ‘public health versus private health’, ‘drugs and medication’, and ‘advertising, celebrity culture and endorsement’.
From these clusters, a set of axes was developed; personal versus collective responsibility, and approach to change on the other (quick fix versus slow fix). Four distinctive scenarios emerge.
Most significant across all the scenarios is the message that the food and drink sectors face a growing level of controversy, scrutiny, activist confrontation and political intervention. The consensus of the past few affluent decades is fading; companies can no longer automatically expect to be trusted to produce the right products, and can no longer rely on the defence that consumers are solely responsible for what they eat and drink.
Analysis of the trends indicates that these issues are unlikely to go away. On the contrary, businesses are likely to face tightening formal rules and informal expectations. Especially in Europe, the focus is likely to widen, from obesity to other health-related issues such as additives, chemicals and food technology, and wider still to environmental issues such as waste and climate change.
The analysis suggests that mass markets for food and drink will decline and margins will come under pressure. There is an analogy here with the car industry, which is having to rethink its traditional mass production mentality, embrace shorter production runs and face the technical challenge of tightening regulations on fuel economy and emissions.
We see several messages for WPP in these trends. First, they emphasise the centrality of corporate responsibility to our business. The media industry has tended to see itself as neutral in many corporate responsibility debates, arguing that we merely serve our clients and the responsibility is theirs. It seems clear that this is no longer the case.
Just as supermarkets accept that they have a responsibility for the products on their shelves and how they got there, and banks are now accepting responsibility for the projects they finance, we have a responsibility for how our clients’ products affect the target audience. We cannot escape the kind of scrutiny which our clients have to deal with.
But there is an opportunity here, both for us and for our clients. The upsurge of corporate responsibility is destabilising. It upsets long-standing assumptions, business models and approaches. The result is that markets are likely to become more volatile. That could be an attractive market development – if we and our clients can gain competitive advantage from understanding the changing conditions and being ahead of the game.
If we respond effectively to these upheavals we can help clients identify the market opportunities which will emerge. Because concerns about obesity and other aspects of health don’t just threaten existing products and channels, they create openings for new products and new approaches.
When markets are changing it is even more important than usual that marketers understand what is happening. And that is an opportunity for us. For example, The Geppetto Group, WPP’s specialist agency dedicated to the youth market, has identified several myths and misconceptions – by talking to kids about their views on food and health.
Geppetto’s research helps marketers see the food and health dilemma through children’s eyes, and therefore helps them tackle the challenge better. The main message that comes through is that most young people do want to eat healthily but they don’t know enough about nutrition and there aren’t enough healthy products that are tasty and fun – they don’t want tofu and beansprouts.
We can help our clients address these gaps, first by helping them to understand how markets are changing, and second by helping them develop products and messages which respond effectively to those changes.
More broadly, we will succeed by developing sensitive antennae which quickly pick up emerging signals from consumers, campaigners and politicians, so that we can understand the changes which CR issues will force on consumer markets.
For example, mass-market food and drink products may decline in importance as markets fragment – many niches instead of a few categories. Promoting such products may also be constrained in several areas because of concerns about specific types of food and drink (such as high-fat, high-sugar items) and specific outlets (such as children’s TV). But there will be opportunities in promoting new products and new channels.
Business as usual may no longer be an option, but business as unusual could be more rewarding, in every way.